So Toast make most of their money on hardware and accompanying software
Cost of Goods Sold (COGS): $2,227 million
Non-production costs: $884 million
R&D: $280 million
Non-production and R&D costs don't seem excessive. Toast, Inc make a good product widely used and yet cannot make a profit after ten years, and are unwilling to raise the price of their actual product (hardware) to cover costs.
Their big competitor is Square who also lost $540m last year.
If ZIRP-era tech funding across the industry pushed down restaurant equipment prices such that it's not profitable for Square and Toast, have VCs been indirectly subsidising my dinner?
10% of the cost of goods sold on R&D doesn't seem too wild. That has to include all (hardware) product design and likely a good chunk of software development costs as well.
For NCR, a 'boring legacy' POS manufacturer that number is 6%, but they have a bunch of older existing products (founded in 1884!)
I found it odd too. What kind of real research could they be doing. Not all ideas that a team riffs on qualify a research. Maybe this is another case where IRS audits could help out?
Cost of Goods Sold (COGS): $2,227 million Non-production costs: $884 million R&D: $280 million
Non-production and R&D costs don't seem excessive. Toast, Inc make a good product widely used and yet cannot make a profit after ten years, and are unwilling to raise the price of their actual product (hardware) to cover costs.
Their big competitor is Square who also lost $540m last year.
If ZIRP-era tech funding across the industry pushed down restaurant equipment prices such that it's not profitable for Square and Toast, have VCs been indirectly subsidising my dinner?